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A Look at LIBOR
March 17, 2022 | Issue No. 2

We appreciate all the kind comments and support for our premiere issue of the new Cabinet News and Views last week. 

For this week's issue, few topics have dominated the financial news over the past few years more than the transition away from LIBOR. We encourage you to take a look, in tandem, at our takeaways from the new federal LIBOR legislation and our Cadwalader Corner Q&A interview with Morgan Stanley's Tom Wipf, who also serves as the chair of the Federal Reserve's Alternative Reference Rates Committee (ARRC). Tom provides some insights into where the LIBOR transition stands now in light of President Biden's signing into law of the Consolidated Appropriations Act, 2022, which includes federal legislation that covers legacy financial contracts tied to LIBOR. 

Speaking of topics in the news, in this week's In Depth article, Michael Ruder looks at possible SEC amendments to enhance and standardize registrants’ climate-related disclosures for investors. 

We continue to welcome your comments and questions. Just write to us here.

Daniel Meade & Michael Sholem
Co-Editors, Cabinet News and Views

Profile photo of contributor Lary Stromfeld
Partner | Financial Regulation

Modelled on legislation prepared by the ARRC and enacted by New York and other states, on Tuesday the President signed federal legislation addressing legacy contracts that reference LIBOR after it ceases in June 2023. While it is an extremely important part of the LIBOR transition process, the legislation should not replace proactive management of LIBOR portfolios. The attached deck provides a quick overview of the legislation.

You can view it here.

Profile photo of contributor Peter Bariso
Associate | Corporate

At an open meeting last week, the Securities and Exchange Commission proposed amendments “to enhance and standardize disclosures regarding cybersecurity risk management, strategy, governance, and incident reporting by public companies.” Recognizing the growing risk of cybersecurity in today’s digitally connected world, SEC chair Gary Gensler spoke on the benefits to investors of consistent and comparable disclosure on (i) material cybersecurity incidents affecting public companies and (ii) public companies’ cybersecurity risk management policies, strategy and governance.

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Profile photo of contributor James A. Treanor
Special Counsel | White Collar Defense and Investigations

As the conflict in Ukraine grinds on, sanctions against Russia have continued to tighten. President Biden issued Executive Order 14068 of March 11, 2022, on Prohibiting Certain Imports, Exports, and New Investments with Respect to Continued Russian Federation Aggression.

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Profile photo of contributor Michael Sholem
Partner | Financial Services

On March 11, 2022, the UK Financial Conduct Authority, the Office of Financial Sanctions Implementation (part of HM Treasury) and the Bank of England published a joint statement on sanctions and the cryptoasset sector. The primary focus of the Statement is to reiterate existing AML and sanctions controls whilst making it clear that the cryptoasset sector is “expected to play their part in ensuring that sanctions are complied with.” It makes clear that action will be taken against sanction breaches by registered firms and attempts by sanctioned parties to utilise cryptoassets to circumvent restrictions.

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Profile photo of contributor Daniel Meade
Partner | Financial Regulation

Earlier this week, Sarah Bloom Raskin withdrew her nomination to be Vice Chair of Supervision and a Governor at the Federal Reserve Board.

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Profile photo of contributor Michael J.  Ruder
Special Counsel | Capital Markets

The SEC announced that it will consider whether to propose rules to enhance and standardize climate-related disclosures for investors at an open meeting scheduled to take place on March 21, 2022.

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Profile photo of contributor Jason M. Halper
Partner | Global Litigation
Profile photo of contributor Ellen V. Holloman
Partner | Global Litigation
Profile photo of contributor John T. Moehringer
Partner | Intellectual Property

On March 9, 2022, President Biden issued an Executive Order on Ensuring Responsible Development of Digital Assets. The Executive Order acknowledges that there are climate risks posed by the proliferation of digital assets, specifically cryptocurrency mining. Among other directives, the Executive Order instructs the Director of the Office of Science and Technology Policy, in consultation with other agencies, to issue a report in 180 days addressing “potential uses of blockchain that could support monitoring or mitigating technologies to climate impacts, such as exchanging of liabilities for greenhouse gas emissions, water, and other natural or environmental assets” as well as the “implications for energy policy, including as it relates to grid management and reliability, energy efficiency incentives and standards, and sources of energy supply.” This article evaluates current mitigation efforts that may be assessed or expanded on in the Report. Entities in the digital asset and blockchain ecosystem and investors should familiarize themselves with these climate risk mitigation efforts in advance of any policy or regulation that may come out of the Report.

Read our Clients & Friends Memo here.

The inclusion of LIBOR contract remediation language in the recently passed federal legislation is a critical step forward for financial institutions. We caught up with Tom Wipf, Vice Chairman of Institutional Securities at Morgan Stanley and Chair of the Federal Reserve's Alternative Reference Rates Committee, to talk about what this means for financial institutions today.  

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Maurine R. Bartlett
Senior Counsel
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Sukhvir Basran
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Brian Foster
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James Frazier
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Mark Howe
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Gregg Jubin
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Philip S. Khinda
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Ivan Loncar
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Peter Y. Malyshev
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Jed Miller
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Michael Newell
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Alix Prentice
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Rachel Rodman
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Richard M. Schetman
Senior Counsel
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Lary Stromfeld
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Jonathan M. Wainwright
Senior Counsel
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